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EXECUTIVE SUMMARY This Executive Sun~xnary has been prepared as a general overview of the City of South Bend's 2006 Budget. The 2006 Budget for all City funds totals $163.4 million far operating expenditures and $19.3 million for capital expenditures. As explained in mare detail in Section D of this documern, the City's current practice is to submit an operating budget tv the City's Common Council during September for the fiscal year commencing the following January. A capital budget is then submitted far approval during February of the budget year. The mom objective behind the delay in finalizing; a capital budget stems from the City's desire to approve capital expenditures based upon actual cash on hand at the end of the fiscal year. Both the operating budget and the capital budget are approved by the Common Council through the passage of several ordinances. The budget becomes legally enacted after the City Controller receives approval from the Department of Local Government and Finance. The City oases "funds" and "account groups" to report its financial position and the results of its operations. A fund is a separate accounting entity with aself-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect net expendable available financial resources. Funds are classified into three categories; governmental, proprietary and fiduciary. Each category, in turn, is divided into separate `Fund types": Governmental fiords are used to account for all or most of a government's general activities, including the collection and disbursement of earmarked moneys ("special revenue funds"), the servicing of general long-term. debt {"debt service funds") and the acquisition or construction of general fixed assets ("capital project fiends"). The "general fund" is used to account for all activities of the general government not accounted for in snore other fund. Proprietary funds are used to account for activities similar to those found m the private sector, where the determination of net income is necessary nr useful to sound financial administration. Goods or services from such activities can be provided either to outside parties ("enterprise funds") or to other departments or agencies primarily within the government ("ioterz~al service funds"). Fiduciary funds {"trust and agency funds") are used to account for assets held on behalf of outside parties, including other governmental units, or on behalf of other funds within the same government unit. When these assets are held under the terms of a formal trust agreement, a pension trust fund or an expendable trust fund is used. The teen "expendable" means the City is under no obligation to maintaig the frost principal. Agency funds generally are used to account for assets that the government holds on behalf of others as their agent. The City establishes operating and/or capital budgets for thirty-three separate fiends. These thirty- one budgets are grouped 'into six major fund types as follows: General Fund, eight Special B_i